Austria sticks to digital tax despite US pressure

“We need a tangible political agreement and need to know precisely which digital taxes are coming in the future,” Blümel said. [Shuttestock/Alfa Photo]

Finance Minister Gernot Blümel has ruled out the suspension of the Austrian digital tax that was introduced in 2020, while the European Commission announced on Monday that it would put the proposed digital levy on hold until a deal among G20 countries is reached.

“We need a tangible political agreement and need to know precisely which digital taxes are coming in the future,” Blümel said on Monday ahead of the Eurogroup summit in Brussels. The finance minister criticised that big digital platforms are paying fewer taxes compared to other companies. “For that reason, we have introduced a digital tax,” Blümel added.

The US has criticised the Austrian digital tax on multiple occasions and threatened to introduce punitive tariffs if Austria does not back down from its plan.

But Blümel said he is open to compromise at the European level. The US administration has made “a big step” in recent months, Blümel said, referring to the agreements at G7 and OECD levels. He emphasised that the US and the EU are on a “good and constructive track” to reach an agreement on a global minimum tax for big digital companies.

Numerous European countries – most notably France – have introduced digital taxes in recent months after the OECD failed to reach an agreement. The US administration claims that these taxes are disproportionately targeting American companies. (Oliver Noyan | EURACTIV.de)

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